A CCJ can appear on credit records a couple of days after the judgment is rendered. A CCJ can stay on your credit file for up to six years. This is why it’s critical that you look at ways you can remove a CCJ from your credit file as soon as possible.
There are four options for removing a CCJ:
- Pay the amount owed in full within one month of the judgment issue date. This is the fastest way to remove the CCJ from your records.
- Apply to have the CCJ ‘set aside.’ This is an option if you failed to acknowledge the claim or to defend it. Examples of this include if you were not in attendance for the hearing for a legitimate reason or you did not receive the claim form in the post. If you can prove this, the judgment can be removed promptly and expunged from your credit records. Fill out Form N244 to request the judgement be ‘set aside.’ Filling out the application does not guarantee the removal of the CCJ.
- Obtain an IVA. When you get an IVA, the CCJ is cancelled and you pay the amount owed towards the IVA.
- The final option is to wait out the CCJ for the duration of 6 years from the date of judgment. Make sure you repay the debt and the CCJ will be removed automatically when 6 years has passed.
How to Get a Mortgage with a CCJ
Having a CCJ, especially a recent one, indicates to lenders that you have a history of being unable or unwilling to pay back your loans on time. It is possible to get approved for a mortgage if you have a CCJ on your record, but it will negatively impact your chances.
In order to improve your odds of securing a mortgage with a CCJ, the following are important:
- Age of the CCJ: the older it is, the better chance you have.
- If your CCJ has been paid off: you stand an even better chance if the judgment is marked “satisfied.”
- Amount owed: a lower amount owed on the CCJ is more desirable. If you owe too much, it can affect your loan-to-value ratio.
- Number of CCJs: having more than one (1) CCJ can severely limit mortgage options.
- Effects on deposit size: keep a close eye on your deposit rate. The type and age of a CCJ may change the size of expected deposit on a home purchase.
Be sure to consult with multiple lenders during the mortgage search process because qualifications vary between institutions.
How Many Points Does a CCJ Impact Your Credit Score?
The three main credit reference agencies in the UK (TransUnion, Equifax and Experian) use different formulas, criteria and scales to assign credit scores to people. Because of these differences in reporting, it’s hard to pinpoint the exact impact a CCJ can have on your credit score.
We can say with certainty that a CCJ directly impacts your ability to obtain a mortgage, credit card or bank account in the future. For this reason, if you have a CCJ it’s important that you formulate a plan to either have it removed or partner with a credit broker to rebuild your credit and reclaim your financial freedom. Don’t let one mistake prevent you from purchasing your first home, getting a credit card, buying a car or achieving an important life event.
Can You Get a Good Credit Score with a CCJ on Your Credit Report?
There are several ways to build your credit score once your CCJ is closed.
- Make sure you are registered with the electoral roll at your current address.
- Ensure repayment of your CCJ and any other credit agreements.
- Do not apply for more than one line of credit every 3 months.
It’s also a good idea to obtain your statutory credit report and review it for accuracy. You may learn that there are discrepancies on your credit report that need to be corrected. With some time a good credit score is well within your reach.
Take Control of Your Future
Portify offers a simple and easy way to build your credit score with Experian, Equifax and TransUnion. Join a community of 100,000+ members who have seen their scores improve by up to 100 points in just three months. We work with all major UK Credit Reference Agencies to build your credit score.